AF Legal Group Limited (AFL.AX) Earnings Call Transcript & Summary

All right. We're good to go. Good morning, everybody. My name is Rick Dennis, and I'm the Chair of AF Legal Group Limited, and I will chair the mining Annual General Meeting. As we've got a quorum of shareholders, I declare the meeting open. Just for a test, can you all hear me online? Stace, can you hear me?

Yes, I can, Rick.

Thank you. On behalf of the Board and the executive team, I'd like to welcome you and thank you for coming. Firstly, I'd like to introduce a Non-Executive Director colleagues on my left Peter Johns; and on my right, Emma Fredericks, and I think you basically all support the guidance during the year. Also attending is our Chief Executive, Chris McFadden, who's here in person; our Chief Financial Officer, Stace Boardman, who is online; our Company Secretary from Source governance, Stephanie So; and the company's auditor from PKF to follow, Tim Bow. Tim will be available during the meeting to answer any questions in relation to audit or related matters. Our share registry, Computershare is also present, and I point David Maffescioni as our returning officer, and to conduct poll. In relation to questions, the virtual component of this meeting is being held by Computershare's online meeting platform that allow shareholders and proxy holders to participate on the webcast as well as to ask questions and submit votes. Questions can be submitted at any time. To ask a question on the Q&A icon and select the topic, your question relates to. Type your question into the chat box at the bottom of the screen and press send. If you want to ask a verbal question, please follow the instructions on the virtual meeting platform. Please note that while you can submit questions from now, I don't intend addressing them until the relevant time in the meeting. Please note also that if we receive multiple questions on the same topic, I might amalgamate those questions together. Should we run out of time to answer all your questions, subject to time constraints, we'll endeavor to get back to you either by e-mail or posting on our website. In relation to how to vote, when we reach the formal business at the meeting, voting on all resolutions is going to be conducted by poll Shareholders wishing to vote on a resolution being put to the meeting can do so via the virtual meeting form. You are eligible to vote once voting opens, press the vote icon and all resolutions will be activated with voting options. And to cast your vote, we select for, against or abstain, and you should receive a confirmation notification on your screen. If you've already lodged a proxy, please note you don't need to vote again treaty online portal unless, of course, you wish to change your proxy instruction, as vote's going to be already counted in a pole resolution as per your instruction. If you have any technical issue, please call the support number on the online meeting going. So to allow shareholders time to vote and ask questions, I'll now declare voting open on all items of business. I will remain open until I declare it close to the end of the formal business. I'd like to start by saying a few words about the company, and I'm going to buy Chris McFadden, our CEO, to provide his presentation on 2025's performance and numbers. Our current trading and the outlook for the year ahead, that will then be followed by the formal business of the meeting, at which time we'll take questions. So your comments from me, fiscal '25 saw continuing progress for our company. as we continue through our growth phase, particularly following the second quarter acquisition of our strong legal criminal family law purposes and the armstronglegal.com.au website has built upon the earlier acquisition of the Armstrong Legal contested [ Wheels & Estates ] business in late financial year '24. These additions when combined with 11% growth organically or we now listing business saw us deliver an overall 27% year-on-year lift in revenue to circa $28 million, $7.6 million. with an encouraging 77% increase in underlying profit, with normalized net profit before tax attributable to the owners of the AF Legal Group of $1.382 million. During the year, several rental expenses charges totaling $1.5 million, adversely impacted statutory profit as opposed to normalized profit. These one-off expenses and charges have been detailed previously, cleaning to ASX. They included acquisition costs of $0.145 million, legal defense fees of $1 million or $1.088 million and the first of our new practice management and documentation management system, which we refer to as Project Titan, the first of those expenses of $0.268 million. The circumstances of the legal defense fees which were outlined in previous ASX announcements involved 2 separate matters, one of which was shuttled during the year and as advised to the ASX. The remaining matter relates to an ongoing regulatory investigation, but doesn't involve a claim for damages. Project Titan costs are expensed as we incur them, and it's anticipated that during financial year 2026, further $1.2 million in cost in order to go live and conclude that project with a bit of creating more margin efficiency incurred all likely to be incurred. During fiscal 2025, we undertook our Second Great Place to Work Survey. So I sure our internal team member approval metric rise from a relatively low 53% in 2023 to a pleasing 84% in October 2024. We deliberately promote that we are a great place to work, and it's a strong confirmation of the positive internal perception of our transition to an organization that really is people first and practice led. Chris is going to comment further on the most recent survey, which continues to show improvement, in his upcoming address. The retention of lawyers and other team members has improved significantly in fiscal 2025. as has our attractiveness is a great place to build in Korea. Pleasingly also is the fact that we continue to develop our team members with a further 20 promotion announced in June, July 2025. Our development focus remains paramount driven by a desire to present achievable and a career pathways to our team. We believe the quality of these pathways differentiates us from most competitors in the areas at which we practice. We further expanded the coverage of Armstrong legal criminal beyond purely New South Wales -- be on the purely South Wales focused operation we acquired and we now have senior lose in place in Melbourne, Brisbane and Canberra, and we look to grow out this division geographically. Chris will shortly touch on our first quarter performance for the 2026 financial year. And as you'll see that our revenue momentum has accelerated in this current financial year, leveraging our cost base into the improving results in terms of our underlying profit for the first quarter. I would like to thank Peter and Emma for their support our management team, in particular, Chris and Stace, for the hard work that vote and branch forming this company. And to you, our shareholders, for your ongoing support. On that note, Chris, I'm going to pass to you for your comments. Thank you.

Thanks, Rick. Financial year 2025 was a very significant year for the AF Legal Group as we successfully built on the momentum created by our earlier acquisition of the Armstrong Legal Contested Wills & Estates business. Our second strategic acquisition, Armstrong Legal Criminal expanded our footprint into a third core practice area and further strengthen our position as a leading provider of personal legal services. While the 2025 numbers have been well covered previously, they're repeating for the strength of the story they tell. Revenue grew by 27% with underlying profit up an impressive 77%. So clearly demonstrating the operating beige emerging from our scalable cost base. Importantly, these results include only an initial and bushel contribution from the criminal law division as that business continues to integrate and as further grow our legal teams we are well positioned for continued improvement, which we are already seeing in the strong first quarter performance of financial year '26. Revenue momentum accelerated through 2025 fiscal year with average weekly revenue rising from just under $500,000 in the first half to 540,000 in the third quarter and surpassing $600,000 in quarter 4, continuing to climb during the close to the year. That trajectory has carried forward into the opening quarter of financial year 2026. Growth in our people how this revenue exertion layer numbers increased 20% across the year, legal support growing by 30%, so an overall 24% uplift in all fees. This expanding team capacity is already translating into strong activity level into strong activity levels in financial year '26. Our transformation into a people-first practice-led organization is resonated equally across the group. Our Great Place to Work results improved dramatically from 53% in mid-'23, to 84% in October '24, and I'm pleased to share that our most recent survey shows a further gain, lifting us to 85%. This means that 85% of our team members consider AF Legal Group and our various divisions a great place to work, which provides us with a solid foundation for sustainably delivering outstanding client outcomes. We remain committed to continued improvement as our people-first culture remains a central pillar of our strategy. While balance sheet and cash flow fundamentals have been well covered previously, it is worth highlighting that we increased borrowings by the $2.5 million during the year to fund our second strong legal acquisition. And that overall, we delivered a very strong $2.9 million net operating cash inflow for the year '25. This was driven by disciplined data management, robust revenue growth in the favorable timing of settlement, particularly in contested wills and estates for settlement matters, which largely come at the end of the matter. Amid our acquisition activity, Family Law remained focused on consolidation and organic expansion, including new service office premises in [ Julong ] for Victoria and Coburn in WA. Our teams continue to grow across all existing locations, and this has continued into the new financial year. The Board and executive remain active in identifying and assessing national merger and acquisition opportunities to support long-term growth. In the second half of the year, we commenced Project Titan, a major technology and process transformation initiative. Work is progressing on schedule and within budget with go-live expected late in financial year '26. Titan's cloud-based architecture and integrated AI capabilities will deliver significant efficiencies and enhanced workflows and improve client service, all of which will support margin expansion across all practice areas. Our growth engines to continue to strengthen. Leases increased 46% year-on-year, while the cost per lead decreased 23%, reflecting both at greater scale and our enhanced digital performance. Nearly 26,000 people sought our advice during financial year '25, driven by our SEO-driven lead capability enhanced by the integration of the Armstrong Legal website as well as rising organic traffic across our Family Law brands. Organic appointments rose 9% across Family Law and 257%, including our Armstrong Legal, given the comparable comps. Our reputation in the market also continues to grow, reflected in more than 822 5-star Google reviews. Net promoter scores consistently above industry benchmarks. And with over 155 mentions during 2025 across the Australian, the financial review, major daily publications and the ABC, we have cemented outstanding as trusted national experts across family org in rates and criminal law. The successful launch of our brand alignment with the internationally recognized Millie Film further strengthened our national brand presence. Financial year '25 established strong and accelerating revenue momentum and early financial year '26 results show that this momentum is continuing to build. This positions us strongly to execute our growth strategy through '26 and beyond. Our focus remains clear: profitable revenue growth, margin expansion through operational leverage, continue investment in our exceptional people and an unwavering commitment to the client experience. As I've said many times, both to our outstanding team and to our shareholders to be yet to come for AF legal Group. Now let's turn to our first quarter '26 results, which are included in the presentation Okay. So quarter 1 delivered very strong revenue growth, 43% relative to the prior corresponding period. You actually saw our average weekly revenue, which was 605 in quarter for last year increased to $692 and even higher towards the end of Q1. And obviously, that's a new high for us. And matching that 43% growth in revenue, we saw a very pleasing growth of 116% in our bottom line. So our bottom line underlying profitability of $782,000 was up $420,000. And relative to our prior year -- our full year FY '25 underlying profit of $1.382 million. We actually achieved 57% of that level in the first quarter, a very positive start. Quarter 1 saw us attracting further lawyers as another 7 yes, 5 of those had senior associate or above level in addition to further 2 promoted within our own team. So overall, increase over the prior quarter. A great place to work, I've just sort of mentioned that, to be honest, I probably won't go into that in detail. But obviously, it is a very positive level of team satisfaction on morale that we're very proud of. And as Rick touched on earlier, it's also aided our retention levels, which are at record levels and enhanced our ability to attract lawyers into our organization. And that's what is driving a lot of our revenue growth. In quarter 2, which we'll touch on later, has definitely started strongly as well. So next slide, please. Okay. This is the snapshot slide that we have just to show how things have been going. And I think that couple of things I'll call out before I get into the detail. The 1 on the left is quarter 1 for the current period relative to halves as is the one on the right. So the half year revenue and the normalized net profit before tax attributable slides are quarter against halves, the center of the slide, the average weekly revenue is quarter-on-quarter. And I think that you can see there that everything is definitely moving in the right direction. You look at the size of that half year revenue. And you can see that the quarter the Q1 revenue, sorry. And you can see that relative to those previous halves, it's well past half of those. So we're on track for something good there. You can see the steepness in the average weekly revenue, the trajectory is definitely increasing. So that graph increases its steepness, if you like, we're showing significant revenue growth. And again, on the final slide, the profitability, the underlying profitability, you can see that at $782,000 it compares very strongly against previous half shown on that graph. Next slide, please. Okay. Revenue, our revenue does continue to accelerate. I think that we talked about it there, 43% growth on the prior corresponding period. up also 14% on the level that we achieved in quarter 4. Strong contested wills was up 46% on prior corresponding period. But also important to point out, and I think we've taken this in the year-end numbers that the momentum that was building in Family Law over the second half of FY '25 has definitely continued. So up 31% on PCP, whereas quarter 4 was up 24%. So we continue to strengthen in Family Law, Criminal Law noncomparable given that it was acquired at the end of end of October '24. Important thing to note that when you look at those -- you look at that 8,991 relative to the previous half of $14.9 million, let's call it. We will well exceed that half 2 number of $14.9 million for the first half of FY '26. And based on the numbers that we know already, so October and the weekly since we actually passed half 2 either on Tuesday or Wednesday this week. So our upside is from here on in for the balance of the year above that $14.9 million level. So very, very positive strength of revenue there. Next slide, please. Similar here, we're still talking revenue, I guess, in terms of the average weekly revenue, which is just presenting it. But 692,000 for the quarter. As I mentioned, it was strengthening towards the end of the quarter. and that has continued into quarter 2. So the first 6 weeks of quarter 2 sees us building to $700,000 level. So we're definitely seeing further strength in our average weekly revenue number of lawyers in quarter 1 relative to the end of September of the previous year, were up 50%, and our other fee earners were also up by on 27%. So our growing teams are really driving our higher revenue. And as we'll see when we get on to profit. The fact that the profit is growing from this suggests that everything is moving in the right direction from that point of view I would say in relation to the quarter 2 average weekly revenue whilst it it's mid-$700,000 levels at the moment. It may potentially contract slightly because at the end of the calendar year, obviously, we've got closures seasonality. But some of the upside that we do have is those 7 lawyers that we appointed in quarter 1 who were probably half productive at best during Q1, fully productive in Q2. So I think that that's an offsetting benefit that we have against the seasonality there. So both still would -- I would sort of have a bit of caution on just projecting at $750,000 number for Q2. Moving on. Next slide, please. And I think that here, we see our traditional view. And we really are looking at the fact that we are starting to see the leveraging impact on underlying profit becomes clearer as we move on. Obviously, we have our growth in revenue that we mentioned at 43%, but you can see there that the bottom line, the normalized net profit before tax attributable of $782,000, up $420,000 or 116%. So a very positive number there for us. That $782,000 relative to the full year number of $1.382 million is actually 57% of the full year number. I think I might have said that before, but it's worth repeating. In relation to the quarter 1 profit as well to 67% on quarter 4 FY '25, which is far in advance of the quarter-on-quarter revenue lift of 14%. It's largely the growth in revenue is what is driving our bottom line profit. But obviously, the fact that it's 43% growth in revenue and 116% in underlying profit the leveraging benefits associated with the additional revenue are there to be seen. Normalization costs, as Rick mentioned previously, in relation to Titan. So in the first quarter, this continued to another, let's call it, $300,000 for Project Titan were expensed during the quarter, which is in line with what we had sort of flagged in previous announcements. Next slide, please. And just looking at the profit number, the underlying profit number in a slightly different plan, if you like, normalized net profit before tax attributable margin at 8.7% is very strong relative to our short- to medium-term 10% margin aspiration. If we actually adjust the revenue for the minority interest is actually list to 9.6%. So we're getting very close there. Our relatively fixed cost base with centralized cost occupancy and other office costs, enables us to get the operating leverage that sees bottom line profitability lift at a greater rate than the lift in revenue. And we can see that for a while now. So quarter 1, revenue up 43%, profit up $116 million FY '25, revenue up 27%, up $77 million. And off a low base, the number is going to be different in '24, but still very positive revenue up 15%, but profit up by 391% as a segment for a low profit base. I will say in terms of that, where we call it 0.7% or 9.6% for Q1. Q1 has a number of advantages, which make it a seasonally stronger period than Q2 and Q3 and even a stronger period than probably the full year trends as well. One thing that we do call out there in relation to our 10% short- to medium-term margin aspiration. We can get into a little bit more detail here and we'll touch on it a little bit further. But our short-term, medium-term aspiration target for AF Legal is $50 million in revenue with a $5 million net profit before tax attributable. So that's what we are moving towards. Next slide, please, relatively quick through these minimal significant movement in the balance sheet from quarter-to-quarter. Total net assets up by $850,000 the significant movements, as I say, minimal trade receive trade and other receivables up by $1.1 million. That's an increase of 10% at a time where our revenue is growing by 14%. So nothing alarming there. The majority of the lift also is in our Armstrong Legal Contested Wills & Estates and also our Withnalls Family Law division, both of which have a higher proportion of patent, And these paid timings can have impacts on reporting dates as to when the payments actually fall. Pleasingly, in terms of our debt is aging, the greater than 90-day debtors were down marginally by $70,000. But in percentage terms, given that we have an increase in trade and other receivable balance at 56% represents an improvement on the year-end number of 60%. Cash down on the balance sheet by $400,000, which we'll go through on the following slide, borrowings down by $212 million, reflecting a scheduled payment that we made in quarter 1. And really, the other movements up there, some offsetting movements on right-of-use assets and lease liability amounts and also a reduction in the tax liability to reflect the tax payment made in quarter 1. Next, please. cash flow statement, operating cash, I think the one thing to characterize on our cash flow is that it can move around from quarter-to-quarter, you can have reasonably significant swings. And I think the things that actually do have an impact on that, as I mentioned on the previous slide, were those paid end matters. So where you have paid in matters coming in or not, it can move things around a lot. I think historically, historically, in FY '25, we had a net cash from operating activities of $2.9 million. So that was a very strong number. The year before that was $500 million. So you can see how that moves from year to year, and similarly, it moves from quarter-to-quarter. In the quarter, we were cash generated from operating activities of $339,000 couple of things that, that included when you're trying to sort of track it back to other things in terms of profit, there was around a little over $200,000 of payments in quarter 1 related to legal defense fees, which were accrued at the end of year-end. So there in the P&L, if you like, in the previous year, but they paid in this year. And equally, there's around $300,000 of payments in quarter 1 related to Project Titan. The rest there, I will leave it for you to read in relation to the investment activities, nothing significant there, just some minor asset purchases around $100,000. The overall outflow from financing activities of $635,000. So that reflects the regular payment of lease liabilities $371,000 and also that scheduled borrowing repayment that I mentioned of $225,000 during the quarter. So overall, then tying back to the balance sheet that represents the overall cash outflow for quarter 1 of $400,000. Okay. Next slide, and next slide. So we move on to a couple of final slides, which are our focus and outlook, which is a format that anyone who has followed us for a little while, we'd be familiar to. Basically, what we go through here is -- we go through our 4 pillars, if you like, a people first culture and new client activity, profitability and a proven growth model. And all of this is under the umbrella of us becoming a leading provider of personal legal services. I think that the ones that are shown in blue up there pretty much is where there is something going on at the moment or something that has happened in the current year. The rest are ongoing issues that are always going on in a lot of respects. So people first culture. Again, I won't go into it in detail. Great place to work, 85% as we mentioned. Nearly we have mentioned, so we are now at the end of the Millie launches, which have been really positive both in financial year '25 and also in the first 4 to 5 months of the current year. So it gives us a really good opportunity to connect into the local professional market and to really establish some good relationships with other lawyers and also other people involved in Family Law as well. And I think it actually -- it also is a great morale booster for our own teams, and it's also a source of contact for attracting people into our organization as well. So it actually builds contacts that we can convert into new lawyers from time to time as well, which we have done. One thing I will call out there in new client activity as well as we're currently reviewing our new client inquiry process. We have brought in a contact center specialists. I think we are now of a sufficient scale to really to really ramp up our professionality in terms of our contact center, and we are really seeing some very positive trends on that. And I think that some of the numbers in relation to files opened in September, October and even into November are looking very promising for us. And I think they are the benefit of just tweaking a few things in the new client into our process, including enhancing ways to get to more calls. The more calls you answer, the more you have coming through, even if you convert at the same rate, the more point appointments you have. So we are seeing that make quite a difference to our recent numbers, and it's a very positive trend for us. In relation to the rest of it there, I think that we've talked about the profitability trend, we've talked about Project Titan. The one thing I will just say again, it was covered in my infant my address as well. But the focus. Our focus is really clear. It's profitable revenue growth, it's margin expansion through operational leverage, its continued investment in our exceptional people, and it's an unwavering commitment to our client experience. And the client experience is being reviewed and modified as part of that new client inquiry process. So we are trying to move it to more of a client-led journey for them, which can only have positive benefits for us. Next slide. It's our final slide. So this is our growth strategy slide again. It's been in place, I think, March or if I'm going to get the year wrong to be honest, March of '24, I think. And it doesn't change a lot. The things that have happened in the last little while in there for all to read. It's opening new service offices. It's the acquisitions around Armstrong in the second half of FY '25. And it's also geographic expansion in criminal ore and contest wills and states, which, as Rick mentioned, we are already doing. So we've grown that grown that criminal law business, which was purely New South Wales to now have lawyers, single lawyers on the ground in Melbourne, Brisbane and Canberra, so growing it back to a little bit more was previously. A couple of things there to just mention our short- to medium-term aspirational target again for AF Legal, which just listed up their $50 million revenue and $5 million net profit before tax attributable and also our business model in a lot of ways. Our bottom is to grow our bottom line profitability through increased revenue, delivering improved returns due to our relatively fixed cost base and associated operating leverage. So that's the end of the presentation here. So next slide, and I'll throw it back to you, Rick.

Yes. Thanks, Chris, and that was useful. Thank you. There is so much. We'll have an opportunity for shareholders after formal business to come back and anything about we presented. So we hit those questions. We will move to formal business and the resolutions that we intend considering as set out in the notice of meeting that were sent to shareholders on the 24th of October 2025. For the moment, questions should remain risen to a particular revolution that we're imposing. All resolutions today are going to be put through a poll. And at the right time, we'll ask Computershare to collect voting cards as Chair of the meeting and as we indicated in notice meeting, tend but we're authorized all undirected proxies over of the resolution. Notice of meeting was dated 24 October '25 was made available to shareholders in a court with the ASX listing rules and corporations, and if there are no objections, I propose to take that notice as read. Valid proxies have been received and recorded that they're open for inspection. Proxies have been received from shareholders for a total of 28,228,470 shares, which represents 30.87% of the company's issued capital. Details of the proxies will be displayed as each resolution is proposed. All attendees at the meeting will have received an admission card, and net new assistant scream out, pose to take each resolution in the sequence is listed in the notice of meeting. As I mentioned, proxies will be displayed on the screen. Regional opportunity will be given to shareholders or proxy holders to make comments. If you wish to ask a question, please raise your blue or yellow admission card. Shareholders, of course, are also entitled if they're attending virtually to vote and ask questions via the online portal. If we go to the first item, and that relates to the financial statements is to receive and consider the financial report, the directors' report and auditor's report for 2024, and each of those reports was contained within the annual [ report ]. There's no requirement that shareholders vote on or approve the adoption of the financial reports the Board takes the view as shareholders should be offered an opportunity to ask questions about these or any other matters relevant to performance of the company. As I mentioned, the auditor is present any questions relating to the audit or accounting policies or audit independence can be directed to the auditor. I do note that no written questions to the auditor were submitted prior to the meeting. So I now invite questions from shareholders in relation to issue of financial reports. Stephanie, do we have any online questions?

We have not received any questions on our financial statements.

Thank you. Do we have any questions from the shareholders on financial reports? We don't. No questions. We'll move on to the formal resolutions, first being the adoption of the remuneration report for the 2025 financial year, and mentioning it's part of the directors' report, which was contained in the annual report for 2025. The remuneration policy of the company aims to attract motivate and retain employees and the Board unanimously support the adoption of the report. Voting on this resolution is only advisory, it's not binding on the company order board. Of course, we take into account any discussion on the resolution outcome of the vote when considering future remuneration policies and practices of the company. The proxy votes in relation to this resolution are as displayed a and the adoption of this report now open for discussion. Are there any online questions, Stephanie?

No questions, Chair.

Are there any questions from shareholders present? There are no questions. I'll move on to resolution 2, which relates to the election of Emma Fredericks as a Director. And it was appointed to the Board on 1 January 2025, and retires and stands for election. Details of Emma's qualifications and experience are outlined in the notice meeting and the directors excluding Emma unanimously recommend that shareholders both in favor of this resolution. Are there any questions online in relation to this resolution?

No questions received on this resolution?

Any questions from shareholders in relation to this resolution? No? Thank you. Third item of business is the approval of the 10% placement capacity, which was explaining in the explained statement attached to the notice meeting. The directors unanimously recommend that shareholders making over of this resolution. Proxy votes received are as display. Are there any questions or comments from the floor on this resolution?

[ Peter Berg ], a shareholder. Is that a renewal? Is that -- was that already in place and this is the renewal of that?

Yes. It needs to be refreshed as I understand every 3 years rather than there being any intention to renew shares, we have to.

Sorry, just to clarify, it's an annual renewal 10% placement capacity.

All right. It needs to be done every year. Okay.

Are there any online questions?

No online questions received.

Okay. Thank you. The fourth item of business relates to the renewal Again, it is a renewal of the proportional to goes. And the directors you unanimously recommend that shareholders vote in favor of the resolution. The proxy votes in respect of a display. Are there any questions in relation to this resolution. Are there any questions on line, Stephanie?

No questions received on this resolution, chair.

Right. Thank you. So that concludes the resolutions voted on. I ask Computershare to come around and collect your voting form. Shareholders voting online, don't make do anything further. I think they're voting now. They've had an opportunity to submit their votes online. Well, since we've collected those from I now declare the poll closed. The results of the poll will be released and made available on the ASX platform later today. All right. Let's ladies and gentlemen go to open questions and invite shareholders here or online to ask any questions that they wish to ask.

Congratulations to the Board and Chris on excellent result and the progress being made '25 and happening into '26. Short, medium-term target, that's I guess I probably just want to -- is there any sort of less on the short term? Is that 5 years? Or is this something we're just targeting? And do we do that with what we have or is there potentially if opportunistically something came along, would you consider another acquisition or that's not really on the table right now? We're just going to bed down what we've got and just improve that operational leverage through growth in FTEs?

Just before I get Chris to respond, perhaps just before in relation to the first part of your question, we call it a short to medium-term aspiration very deliberately because we haven't called it guidance because it's not guidance. What's meant by short to medium term, I think what we aspire to do get to that level of growth as soon as we can. But realistically, that's probably going to take 2 to 3 years. The only other thing I'd say is that acquisitions are not off the table. I should also say that there are none presently on the table. And I think what the team is focused on very deliberately is organic growth. the results of which I think we're starting to see the benefit here include revenue growth, margin growth, productivity, et cetera, et cetera. Those are some comments I wanted to note, Chris. Over to you.

Yes. Yes. I think on you see the number of people that we've brought on in terms of organic growth is going to get us a long way there, as Rick says, it's probably to a bit is just on organic growth, but who's to say because it can actually come relatively quick. We've got, as we mentioned, 7 new stars in quarter 1. We've got a couple already for quarter 2. We've also tracked evades an accredited specialist to our organization. We have another accredited specialists coming back from rental leave. We've got some real heavy hitters coming back into our organization, which is really positive. I think that we will continue to do that. We will continue to look out individuals that we can into our existing network or potentially our practice around, whether it be a suburban practice, which may be something that we consider. We are definitely looking always to different acquisition opportunities that may exist. That might be in the areas of or even in our other areas of law or potentially could be in a whole new area of law though, probably not firmly effect on any of those at this point in time. I think that we have gaps in our national coverage at the moment, and some of those gaps may lend themselves to acquisitions that fit them rather than starting from scratch. I think suburban practices, you can more start from scratch with the right people within your organization. If you were to enter a state where you weren't, it's probably a little bit less likely. But that you could do that, so you're probably better off to do that. So I think the acquisitions will get us there quicker than the 2 years. So it's the reason we are keen to identify the right ones and move on them if the terms and if they are attractive enough for us to do so.

Chris, I think as you also mentioned in your presentation, the geographic grower out of criminal law opportunity.

Yes, absolutely. So the fact that we have new senior lawyers in new locations there. And it's early days on this, to be honest. And I think that I would say that the Canberra business is doing very well. The others are doing okay. They're not quite to the same sort of level of volume, but they're building every day. Like our criminal law division had its best week ever last week. So that's positive. It's always nice the week before, we had a couple of other practices that had their best on every week. So everything is moving in the right direction. I think that we recognize that they will need to grow beyond a 1 layer practice before too long. And that may even be -- we might even need to do that before they're ready in a way because you sort of you need to build it to them to make it work in the long run. So it may be that we're adding people to those businesses earlier than potentially you would sort of think but for a long-term sustainable growth model that's the important thing.

Other questions?

I have one. With the increase in fee earners, you mentioned the cost per leads decreasing in the client inquiry process that you're starting up. Is there a marketing increase that we need to do keep feed and work through everybody with the bigger numbers? Or are we too at a point where we're just dominant in the market?